Business Highlights: Wall Street downdraft, inflation report

September 13, 2022 GMT

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Markets shudder on dashed inflation hopes; Dow falls 1,250

NEW YORK (AP) — The stock market fell the most since June 2020 following Wall Street’s humbling realization that inflation is not slowing as much as hoped. The Dow lost more than 1,250 points and the S&P 500 sank 4.3%. A hotter-than-expected report on inflation Tuesday has traders bracing for the Federal Reserve to ultimately raise interest rates even higher than expected, with all the risks for the economy that entails. Bond prices also tumbled, sending yields sharply higher, after the government reported inflation decelerated last month by less than economists forecast. The drop didn’t quite knock out the market’s gains over the past four days.

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US inflation still stubbornly high despite August slowdown

WASHINGTON (AP) — Lower gas costs slowed U.S. inflation for a second straight month in August, but most other prices across the economy kept rising — evidence that inflation remains a heavy burden for American households. Consumer prices rose 8.3% from a year earlier and 0.1% from July. But the jump in “core” prices, which exclude volatile food and energy costs, was especially worrisome. It outpaced expectations and ignited fear that the Federal Reserve will boost interest rates more aggressively and raise the risk of a recession. Fueled by high rents, medical care and new cars, core prices leaped 6.3% for the year ending in August and 0.6% from July to August, the government said Tuesday.

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Whistleblower: China, India had agents working for Twitter

WASHINGTON (AP) — Twitter’s former security chief told Congress Tuesday there was “at least one agent” from China’s intelligence service on Twitter’s payroll — and that the company knowingly allowed India to add agents to the company roster as well. These were some of the troubling revelations from Peiter “Mudge” Zatko, a respected cybersecurity expert and Twitter whistleblower who appeared before the Senate Judiciary Committee to lay out his allegations against the company. Zatko, who was fired earlier this year, said Twitter’s leadership is “misleading the public, lawmakers, regulators and even its own board of directors.”

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A piece of the queen: New souvenirs mark monarch’s death

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LONDON (AP) — Just days after the death of Queen Elizabeth II, unofficial souvenirs have rolled out at royal-themed gift shops in London and online marketplaces like Amazon and Etsy. One shop near Buckingham Palace says it pushed its suppliers to work overnight to get mementos ready by Saturday, just two days after the death of Britain’s longest-serving monarch. Now, people have the option to buy fridge magnets, flags, mugs and T-shirts with the queen’s likeness and the dates of her 70-year reign. Some shops say items depicting the new monarch, King Charles III, are on their way. Official merchandise will take longer to arrive to approved vendors, who have suspended sales of royal souvenirs out of respect for the mourning period.

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Biden touts inflation reduction law despite sobering report

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WASHINGTON (AP) — President Joe Biden has gathered a crowd at the White House to celebrate last month’s passage of the Inflation Reduction Act. But that’s as a new government report on Tuesday showed how hard it could be to return inflation to prepandemic levels. Despite its name, the law’s impact on inflation is expected to be modest at best. Although gasoline costs have declined since June, the price of housing and food remain especially high in a way that suggests there will be further Federal Reserve interest rate hikes and more economic pain to bring down prices. ___

Starbucks to revamp stores to speed service, boost morale

SEATTLE (AP) — Starbucks plans to spend $450 million next year to make its North American stores more efficient and less complex. The company also said it plans to open 2,000 net new stores in the U.S. by 2025. The emphasis will be on meeting the growing demand for drive-thru and delivery. Starbucks recently saw the best week for sales in its 51-year history when it introduced its latest fall drinks. But it says stores need better equipment to make drinks more quickly. Among the things driving the revamp is an ongoing unionization effort, which Starbucks opposes. More than 230 U.S. stores have voted to unionize since late last year.

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Bill Gates: Technological innovation would help solve hunger

NEW YORK (AP) — Bill Gates says the global hunger crisis is so immense that food aid cannot fully address the problem. The Bill and Melinda Gates Foundation released a report Tuesday documenting major setbacks toward shared global development goals, including food insecurity. In an interview with The Associated Press, Gates argues that innovations in farming technology, in particular, what he calls “magic” crop seeds are needed to reverse the crisis. The seeds are engineered to adapt to climate change and resist agricultural pests. Some scientists say that reliance on the seeds conflicts with worldwide efforts to protect the environment because they generally require fossil fuel-based fertilizers and pesticides to grow.

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UN: Food exports from Ukraine are up, Russia fertilizer down

UNITED NATIONS (AP) — The U.N. says food exports from Ukraine and Russia have increased since a July 22 grain deal, but critically needed fertilizer exports from Russia are still down despite the agreement. Insurance, financing and shipping remain issues. U.N. trade chief Rebeca Grynspan, said Tuesday that Russia reported a 12% increase in food exports from June to July. But she said while there has been “important progress,” the U.N. is concerned about fertilizer exports needed by October-November for the northern hemisphere planting season. She warned of a “catastrophic crisis” if fertilizer remains unaffordable for many.

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Union, GE reach deal on raises at Massachusetts plant

LYNN, Mass. (AP) — The largest union representing General Electric Co. workers says it’s reached a tentative deal with the company to speed up pay raises for workers at a Massachusetts aviation plant. Under the agreement, workers at GE’s facility in Lynn would be eligible for raises sooner and could reach the top pay rate after six years, instead of up to 10 under the old system. GE has already implemented an accelerated raise schedule at plants in New Hampshire and Vermont. IUE-CWA Local 201, the union that negotiated the deal, called it a “massive win” for workers.

___ The S&P 500 tumbled 177.72 points, or 4.3%, to 3,932.69. The Dow Jones Industrial Average shed 1,276.37 points, or 3.9%, to 31,104.97. The Nasdaq lost 632.84 points, or 5.2%, to 11,633.57. The Russell 2000 index of smaller companies fell 74.51 points, or 3.9%, to 1,831.57.